Virgin Media O2 is reportedly planning to cut thousands of jobs as part of a major cost-cutting drive. The telecoms giant, jointly owned by Liberty Global and Telefonica, is said to be preparing to reduce its 16,000-strong workforce, with thousands potentially facing redundancy in the coming months.
According to Sky News, the reported plans come amid investor concerns about the company's £22bn debt. Sources close to the company said the exact numbers have yet to be confirmed ahead of its third-quarter results next week, when a cost-reduction target will be finalised.
Financial terms expected in report
It is believed the report will confirm the financial, rather than headcount, terms. However, it is anticipated that thousands will be let go, with one source suggesting as many as 4,000 jobs could be cut.
The majority of those affected will be in non-customer facing roles, an insider said, while some senior leadership changes are already underway. Trade union officials at the CWU and Prospect are understood to have been made aware of the shake-up, reports the Mirror.
Review of contractors and suppliers
VMO2 is also reportedly set to review its use of contractors and suppliers to try to cut costs. The move comes as reports by the Financial Times in July indicated VMO2 was looking at options to tackle its debt pile, including slashing its dividend and capital expenditure, following a plummet in the price of its bonds and amid a backdrop of struggling growth in the economy.
The news also comes amid a wider shake-up of the UK's telecoms market, including the recent collapse of TalkTalk Telecom Group, which BT swooped in to take over, and a number of fibre altnets that have collapsed in the last two years. VMO2 job cuts will add to the layoffs at BT Group and Vodafone Three as telecoms companies scale back due to rising costs.
Broader telecoms and banking context
Sky, a competitor to VMO2 in broadband and TV services, also axed hundreds of jobs in September last year. The FT reported earlier this week that VMO2 was inching closer to a deal to use Openreach's network in some areas, to increase its reach from 19 million to as many as 25 million homes.
Meanwhile, in separate news, Barclays announced last week that it will be cutting its workforce by 5,000 by the end of the year. This makes up approximately 5% of the total workforce. The banking group said 1,000 posts had already been closed, with 4,000 more by the end of 2026. The bank revealed it made £2.3 billion in profit from July to September, up 12% from last year.
Most of the job losses are anticipated to occur in Barclays' home market, primarily impacting operational and functional roles. However, the bank stated that its workforce will be affected globally. Approximately 60% of the job cuts involve operational and functional roles, including positions for developers, as reported by ChronicleLive.
